[A2k] UNCTAD TDR is out, criticizes "free trade" & TPP & GVC's

Carolina Rossini carolina.rossini at gmail.com
Wed Sep 10 16:30:46 PDT 2014


September 10, 2014 7:26 pm
UN trade body criticises free trade

By Jonathan Wheatley

The UN’s trade body has joined a chorus of criticism of globalisation
warning that developing countries reap little value from taking part in
global supply chains and that the costs of joining free-trade agreements
may outweigh the gains.

In its annual Trade and Development Report
<http://unctad.org/en/Pages/MeetingDetails.aspx?meetingid=525>, Unctad, the
Geneva-based body that prides itself on being a voice for the global south,
also called for aggressive stimulus programmes to boost global growth.

Governments around the world have turned to regional trade agreements, such
as the Trans-Pacific Partnership
between the US and 11 Pacific Rim countries, in the hope of boosting export
growth after repeated failures to reach a global deal at the World Trade

But Richard Kozul-Wright, Unctad’s head of globalisation and development
strategies, said free trade would not return the global economy to growth.
Instead, he advocated giving countries, especially developing ones, more
freedom to conduct their own economic policies outside the restrictions
often imposed by bilateral, regional or global trade agreements.

“Protectionism is not the big story,” he said. “We need to tackle the big

Writing in the report, Mukhisa Kituyi, Unctad’s secretary-general, called
on governments to use incomes policies such as minimum wages to support
global demand, along with expansionary fiscal policy. He also made the case
for industrial policies to promote investment, stricter regulation and
capital controls to stabilise financial markets, and development-oriented
trade agreements.

Asked which countries best illustrated the benefits of such policies, Mr
Kozul-Wright said China was an obvious example. He also cited Brazil, which
has used “vertical” industrial policies to promote individual sectors such
as information technology, along with minimum wage legislation and income
distribution programmes.

His comments are in contrast to recent criticism of Brazil’s policies
analysts and investors, who have questioned the sustainability of its
minimum wage laws and called for “horizontal” policies such as tax reform
to promote growth across the economy.

The Unctad report argues that horizontal policies have been ineffective in
promoting industrial expansion and that, when applied across borders, they
have put harmful restrictions on national policy makers.

In particular, it argues that countries that sign trade agreements in order
to take part in global supply chains reap little, if any, benefit from
these deals. China, it notes, has taken a dominant role in the global
supply chain for electronic goods, accounting for as much as a third of
global trade in the sector. But Unctad cites a study this year which found
that China took just 3 per cent of the sector’s global profits.

Mr Kozul-Wright said global supply chains were of use to multinational
corporations in only a few industries – primarily electronics, clothing and
textiles and the automotive sector – and of little relevance in sectors
such as chemicals.



*Carolina Rossini *
*Vice President, International Policy*
*Public Knowledge*
*http://www.publicknowledge.org/ <http://www.publicknowledge.org/>*
+ 1 6176979389 | skype: carolrossini | @carolinarossini

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